Direct Benefit Transfer: Central Vigilance Commission

Direct Benefit Transfer: Central Vigilance Commission

Most of you must have heard or read about DBT- Direct Benefit transfer, but that might be confined to mere full form and a few basic details. This blog will get you detailed insights into DBT to help you in your General Awareness in various entrance exams and interviews.

Lead-in to Direct Benefit Transfer:

It is from the times of Rajiv Gandhi that it is being said that for every Rupee spent on welfare schemes, only about 10 Paise reaches the poor man. Direct Benefit Transfer Scheme, part of Jan Dhan, Aadhaar and Mobile Telephony has led to a saving of Rs. 36000 Crore. This has come from a report of Central Vigilance Commission. Direct Benefit Transfer Scheme was launched to ensure that the money that is allocated to schemes does work for the population base it is targeted to. Till 7th December, the number of accounts opened under the DBT scheme was 25.82 Crore. DBT was used for schemes being implemented by 8 ministries. Total number of schemes opted for in order to allow for the trial of DBT is 24.

Planning and implementation

  • Accounts: Since the times of Manmohan Singh and Sonia Gandhi, the UPA Government, has made financial inclusion a priority for itself. Under the Jan Dhan Scheme, zero-balance accounts were opened for individuals from the lower income group. Free accidental and life insurance schemes have been launched for the lowest of monthly payments.
  • Aadhaar: To identify people and have a social security number system to make schemes reach people, Aadhaar scheme was implemented. Linking accounts to this number and transfer of subsidy has been tried for LPG subsidy. This has worked well with the PM asking HNIs to not go for LPG subsidy.
  • Mobile Telephony: This happened before the PM took up financial inclusion as the focus of Government’s initiatives. For nearly 25 years, telecom sector flourished. Cheap mobile telephony is also being thought of as a mode of financial inclusion through telecommunication based payment banks. Licenses for these were allocated recently by the Reserve Bank of India.


Direct Benefits Transfer: Where?

  • Gas subsidy: Subsidy is provided in petroleum products, be it gasoline & diesel or LPG. As far as LPG subsidy is considered, as oil prices fell it became easy to allow for removal of LPG subsidy for families that have total family income of less than Rs. 10 Lakhs. Unsubsidized cylinder is also cheap in comparison to the prices when oil was $100 a barrel.
  • Scholarship: Students are given a scholarship and that money is transferred directly to their accounts. This has not been adopted to a large extent but only for a few schemes.
  • MNREGA: One of the two schemes where this programme has been seen as the one to be necessarily implemented. MNREGA daily wage is different across states – ranging from 80 to 150. The total wage, if not paid on a daily basis, can be paid directly into the accounts. Aadhaar has brought about a new way of identifying people in the banking system.
  • Food Guarantee Act: This is where the effort has been in terms of implementation. Those below the poverty line get grains at lower rate ranging from Rs. 1 to Rs. 3 per Kg for rice, wheat and other grains.

We are well into the second decade of the new millennium. Poverty alleviation is talked of in every five year plan. With Niti Aayog having come into the picture, five year plans are not going to be worked upon but poverty alleviation remains important for each Government.

Savings were expected as manpower is used in providing scholarship, MNREGA wages and PDS system. Also, MNREGA having been the policy that dictated UPA’s socialism with Economic Advisory Council working on the details of implementation, the kind of work provided and wages along with society activists keeping an eye on implementation have always been in the news. Savings also come through as more than 90% money is used in welfare.

Hope you find our post informative enough to help you answer questions on the same.